Member Sign In

You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.

If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.

Will Monsanto (MON) Miss Earnings Estimates?

Agricultural chemicals company Monsanto Company (MON - Free Report) is scheduled to release its second-quarter fiscal 2014 results before the opening bell on April 2. In the last quarter, the company delivered a positive earnings surprise of 6.35%. Let’s see how things are shaping up for the company prior to the announcement.

Factors to Consider

Monsanto reported improved year-over-year results in the first quarter of fiscal 2014. Adjusted earnings per share increased to 67 cents in the quarter from 62 cents in the year-ago quarter. The 7% year-over-year hike in revenues to $3.1 billion resulted from the launch of products and inorganic growth. However, the continuous product launches increases the company’s expenses. In the first quarter of fiscal 2014, the company experienced a 12.4% year-over-year increase in operating expenses. These expenses are expected to continue increasing thereby affecting margins.

Additionally, the foreign operational hazards including changes in local, political or economic conditions; governmental policies and pricing directives; as well as import and trade restrictions in foreign economies add to the peril.

Earnings Whispers

Our proven model does not conclusively show that Monsanto is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as we see below.

Zacks ESP: Monsanto’s Most Accurate estimate stands at $3.01, while the Zacks Consensus is pegged slightly higher at $3.10. Hence, the Earnings ESP is -2.90%.

Zacks Rank: Monsanto has a Zacks Rank #4 (Sell) which lowers the predictive power of ESP. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Monsanto witnessed downward movement of estimates in the past 30 days for the upcoming quarter as well as for fiscal 2014.

Other Stocks to Consider

Here are some other companies in the industry that investors may want to consider on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter:

Resources

Client Support

Follow Us

Zacks Research is Reported On:

Yahoo

MSN

Marketwatch

Nasdaq

Forbes

Investors.com

Morningstar

Zacks Investment Research is an A+ Rated BBB Accredited Business.

Copyright 2016 Zacks Investment Research

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1988-2015 and were examined and attested by Baker Tilly Virchow Krause, LLP, an independent accounting firm.

Visit performance for information about the performance numbers displayed above.